Executive Summary

Q1 2025 delivered resilient growth in software and strong profitability: total net sales $201.1M, GAAP diluted EPS $1.05, non-GAAP diluted EPS $1.24, and Adjusted EBITDA $68.2M with 33.9% margin, driven by mix shift to software, cost actions, and lower bad debt expense .
Results beat Wall Street: revenue beat consensus by ~$9.2M (~4.8%); Primary EPS of $1.24 topped the $0.70 consensus; revenue was also above the high end of internal guidance due to stronger transactional activity and timing benefits in investment companies* .
Mix shift continues: software solutions net sales reached a record $84.6M and 42.1% of total; recurring compliance products (ActiveDisclosure, Arc Suite) grew ~16% in aggregate, while Venue declined on lapping outsized rooms .
Outlook: Q2 2025 guidance calls for net sales $215–$235M and mid-30% Adjusted EBITDA margin; management expects softer print, continued Venue headwinds, and transactional revenue of $35–$45M while recurring software momentum persists .
Capital deployment accelerates: ~861K shares repurchased for $41.8M in Q1 and additional ~657K shares repurchased in April; net leverage 0.8x and ample liquidity support ongoing buybacks and investment .

What Went Well and What Went Wrong

What Went Well

Margin expansion and EBITDA outperformance: Adjusted EBITDA rose 24% YoY to $68.2M and margin expanded ~680 bps to 33.9% on mix shift, cost control, and lower bad debt .
Recurring compliance software strength: ActiveDisclosure and Arc Suite each delivered double-digit growth; combined recurring compliance software sales grew ~16% YoY; management highlighted service packages, contract term extension, and pricing as drivers .
Strategic cost actions and mix optimization: Permanent cost reductions and aligning the cost structure to seasonality/cyclicality supported profitability; management emphasized continued efficiency initiatives and automation/AI investments to scale .

Quote: “Our focused execution, combined with aggressive cost management actions, resulted in strong quarterly Adjusted EBITDA and Adjusted EBITDA margin.” — CEO Daniel Leib .
Quote: “We delivered year-over-year net sales growth of approximately 6% on an organic basis, driven by approximately 16% growth in our recurring compliance... ActiveDisclosure and Arc Suite.” — CEO Daniel Leib .

What Went Wrong

Venue and capital markets compliance softness: Venue sales declined on tough comps; capital markets compliance revenue fell $7.8M YoY amid lower print volumes and softer demand for event-driven filings .
Negative free cash flow in Q1: Free cash flow was -$51.0M, worsened YoY by ~$10.8M due to working capital timing and performance-based payments .
Continued macro uncertainty: Transactional activity remained below historical averages; management expects ongoing volatility and tariff/macro uncertainty to weigh on deal completions .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$179.5	$156.3	$201.1
GAAP Diluted EPS ($)	$0.29	$0.21	$1.05
Non-GAAP Diluted EPS ($)	$0.48	$0.40	$1.24
Adjusted EBITDA ($USD Millions)	$43.2	$31.7	$68.2
Adjusted EBITDA Margin (%)	24.1%	20.3%	33.9%

Consensus vs Actual (Q1 2025):

Metric	Consensus	Actual
Revenue ($USD Millions)	$191.9*	$201.1
Primary EPS ($)	$0.70*	$1.24 (non-GAAP)

Values retrieved from S&P Global*

Segment breakdown (Q1 2025):

Segment	Net Sales ($M)	Adjusted EBITDA ($M)	Adj. EBITDA Margin (%)
Capital Markets – Software Solutions	$51.9	$13.9	26.8%
Capital Markets – Compliance & Communications Mgmt	$83.9	$36.7	43.7%
Investment Companies – Software Solutions	$32.7	$12.8	39.1%
Investment Companies – Compliance & Communications Mgmt	$32.6	$12.2	37.4%
Corporate	—	-$7.4	nm
Consolidated	$201.1	$68.2	33.9%

KPIs (Q1 2025):

KPI	Q1 2025
Software Solutions Net Sales ($M)	$84.6
Software as % of Total Net Sales	42.1%
Non-GAAP Gross Margin (%)	63.7%
Adjusted Non-GAAP SG&A as % of Sales	29.8%
Capital Markets Transactional Revenue ($M)	$48.6
Free Cash Flow ($M)	-$51.0
Non-GAAP Net Leverage (x)	0.8x
Shares Repurchased (Q1 units / $)	861,301 / $41.8M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Net Sales ($M)	Q2 2025	Not provided	$215–$235	Initiated
Adjusted EBITDA Margin (%)	Q2 2025	Not provided	Mid-30%	Initiated
Venue Revenue Trend	Q2 2025	Not provided	Decline similar to Q1, ~$2M headwind from outsized rooms	Initiated
Capital Markets Transactional Revenue ($M)	Q2 2025	Not provided	$35–$45 (midpoint down ~$5M YoY)	Initiated
Compliance-based Sales (Capital Markets)	Q2 2025	Not provided	Modest YoY decline; print a key driver	Initiated
Investment Companies Print & Distribution	Q2 2025	Not provided	Lower vs Q2 2024 due to timing shift and reduced page counts under TSR	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Regulatory Tailwinds (TSR)	TSR lifted Arc Suite; Venue strong	Software mix largest; recurring products grew (Arc Suite, AD)	TSR continues to lift Arc Suite; timing shift impacted print volumes	Sustained positive tailwind
Transactional Environment	Soft vs history; transactional revenue down YoY	Uptick to start 2025 but still uncertain	Modest rebound early Q1; macro/tariffs cut activity in March	Tentative improvement then volatile
Cost Structure & Efficiency	Margin resilient despite softness	Improved full-year profitability; cost discipline	Permanent cost actions + disciplined SG&A drive margins	Continuing improvement
Software Mix Shift	Software % of net sales rising	Software became largest component in FY	42.1% mix; recurring AD/Arc Suite +16%	Structural shift higher
Capital Allocation (Buybacks)	Ongoing repurchases	Continued buybacks; authorization remaining	Aggressive repurchases in Q1 and April; grid-based pacing	More aggressive at lower prices

Management Commentary

Strategy: “Accelerating our business mix shift by continuing to grow our SaaS revenue base while maintaining share in our core traditional businesses… capitalize on regulatory tailwinds” — CEO Daniel Leib .
Operating model: “Optimized and variable cost structure… downsizing print platform, internal efficiencies, reducing physical footprint” — CEO Daniel Leib .
Macro/tariffs: “Do not anticipate any significant impact… ~90% of revenue derived from the U.S.; software/services largely insulated” — CEO Daniel Leib .
Technology: “Applying automation and AI-driven tools, including commercial AI solutions and our own Agentic AI development to streamline workflows” — CEO Daniel Leib .
Capital deployment: “Organic investments to drive transformation, share repurchases and net debt reduction each as key components” — CFO David Gardella .

Q&A Highlights

Margin drivers: Cost reductions came in better than planned; higher transactional revenue (~$49M, ~~$4M above guidance); timing shift (~~$3M) into Q1; bad debt expense declined ~$2.7M YoY, exceeding expectations .
Segment outlook: AD to grow YoY; Venue headwinds from lapping outsized rooms; capital markets compliance modest YoY decline (print); investment companies print down in Q2 on timing shift and lower page counts under TSR .
Competitive positioning (AD/Arc): Net client growth, higher ACV, more 3-year contracts, service packages up 36%; platform seen as most advanced disclosure tool, hybrid software/service model as differentiator .
Credit facility cost: Variable SOFR + spread; all-in ~7% currently at lowest spread tier .
Buyback cadence: “More aggressive at lower prices… continue to buy back within confines of leverage” .

Estimates Context

Q1 2025 beat: Revenue $201.1M vs $191.9M consensus; Primary EPS $1.24 vs $0.70 consensus* .
Guidance impact: First-quarter revenue above high end of internal guidance on better transactional revenue and timing shifts, suggesting upside risk to estimates in recurring software; however, Q2 guidance implies YoY revenue decline on print and Venue headwinds .
Note: S&P’s EBITDA consensus ($46.7M*) is not directly comparable to DFIN’s Adjusted EBITDA ($68.2M), which excludes specified items per non-GAAP definitions .